Gold is rapidly becoming the last haven in a sea of uncertainty as worries rise about the ability of not only commercial banks, but even governments, to repay debts.

With few signs that the world’s worst economic crisis since the 1930s is close to bottoming out, wrung-out investors will keep on pumping money into gold-backed securities as insurance against financial Armageddon.

But like most insurance policies, investors hope it won’t pay off.

“Gold is an investment you hope you never make money on. If you do, it means other markets have lost,” said Stephen White, director at Sydney-based treasury advisory firm Noah’s Rule.

He added: “Cash is king and gold is cash in any currency. In the short term, gold will continue to appreciate but once stability returns be ready for a quick fall, possibly similar to those we have seen in other commodities.”

Gold’s gains are being powered by two forces — either of which could spell disaster for other more conventional assets classes. The first is the risk that the greenback may collapse under inflationary pressure from the weight of the trillions of dollars Washington is injecting into the economy.

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The second is the risk of debt default in the eurozone as the European Central Bank keeps its more hawkish stance on monetary policy.